Casino Suit Touches Rolling Meadows

January 22, 1993|By Janan Hanna.

Rolling Meadows officials say they believe a plan for a Las Vegas-style casino there is still viable, even though leaders of the Indian tribe that would own it have sued the management company that would run it over the operation of a similar casino in Wisconsin.

Some leaders of the St. Croix Chippewa tribe have filed a federal suit alleging that the management group, Buffalo Brothers Inc. of Palatine, has been taking too large a chunk of the profits from a Chippewa casino it runs in Turtle Lake, Wis.

And federal gaming officials said they were examining the business relationship between the tribe and Buffalo Brothers before the suit was filed.

Concerned about the allegations, Wisconsin gaming officials said they will watch the case closely for possible violations of agreements with the state concerning casino operations.

In Rolling Meadows, Barbara Evenson, co-founder of a citizens group to fight the casino plan, said, "I'm very disappointed that our city officials were aware of this lawsuit and they went ahead and signed a contract with the Indians."

City officials signed a contract with the tribe on Dec. 23, a week after the suit was filed.

But they said the dispute will not derail the proposal for a 220,000-square-foot gaming center at Algonquin Road and Illinois Highway 53. The plan was approved by the City Council in November, a week after residents had voted against the idea in a non-binding referendum.

"Our agreement is with the tribe, not with Buffalo Brothers," said Bob Beezat, city manager for Rolling Meadows. "I'm not going to comment on somebody else's lawsuit. I'm not a judge or an attorney. It's between the tribe and the management company."

The lawsuit is based on the Federal Gaming Act of 1988, which limits the profits that outside management firms can reap from Indian-run casinos.

The controversy centers on Roy Palmer and Ron Brown, owners of Buffalo Brothers and another company, Interstate Gaming Services Inc., that leases slot machines and other gaming equipment.

According to allegations in the lawsuit, which names both companies and their principals as defendants, Buffalo Brothers was taking 40 percent of the net revenue from the Wisconsin casino, including the proceeds of the hundreds of slot machines there. The suit also alleged that Interstate Gaming-owned by the same people-was receiving 30 percent of the profits from the slot machines.

Although the appropriate authorities had approved a management agreement authorizing Buffalo Brothers to take 40 percent of the profits, the seven-year lease agreement involving the slot machines had not been properly approved, according to the lawsuit. And managers of reservation casinos are prohibited by the federal law from receiving more than 40 percent of the profits.

The plaintiffs in the suit-Chippewa Tribal Council members Kenneth Mosay and Mary Washington, and the traditional chief of the tribe, Archie Mosay-are demanding the dissolution of the management contract with Buffalo Brothers and the return of slot machine proceeds from August 1991 until late last year.

After reporters inquired about the lease agreement, Interstate Gaming offered to sell the slot machines to the tribe instead of continuing with the lease agreement.

James Townsend, a Minneapolis attorney representing the plaintiffs, said that "several hundred" slot machines were being leased in the Turtle Lake casino and that his clients are looking to recover more than $1 million.

The purpose of the Federal Gaming Act, he said, "is to prevent exploitation of American Indians by aggressive sharpshooters. This is an egregious case."

Nick Romito, a partner with Brown and Palmer in Buffalo Brothers and Interstate Gaming, said, "The tribe has adopted a resolution that fully endorses our contracts." He said he could not comment on pending litigation, and his attorney did not return a phone call placed to his Wisconsin office.

Don Saros, the Chippewa tribal chairman and one of three members of the Tribal Council who reportedly remain allied with Buffalo Brothers, also did not return phone calls placed to tribal headquarters.

The gaming act allows American Indians to apply for gaming permits for reservation land, or for land it wants to acquire. That land is not subject to taxation, and it may be used for gaming purposes provided that some form of gambling exists in the state.

Tribes must have the approval of municipal and state authorities and the U.S. Department of the Interior to build a casino. They also must enter into a compact with the state detailing the types of gambling that will be allowed, betting limits, and other details of how the casino will operate.

It was not clear what effect the Wisconsin dispute might have in Illinois.